Franchisees Struggle with Skittish Lenders

New York--Franchise lenders are hesitant and demanding,
and the reasons why aren't hard to find. Fitch Inc. reports the
asset-backed franchise financing market was largely dormant in the
first quarter, as cumulative defaults totaled $1.7 billion. Many
newly defaulting borrowers were in the quick-service restaurant or
convenience-store businesses, the credit-rating service says.

Similarly, the SBA says the delinquency rate for its
business-loan programs remains high--7.9 percent of loans
outstanding as of June 30. At the same time, the SBA is being asked
by nervous banks and other lenders to guarantee more loans.
-The Wall Street Journal Online